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What the IRS may do about unfiled tax returns

On Behalf of | Jul 9, 2020 | Tax Controversies

Most Massachusetts residents would agree that they do not want to owe money to the government. Some people will avoid that possibility by not even filing their taxes. The problem with that is that when people have unfiled tax returns, they could fail to receive refunds or end up on the IRS’s radar for unpaid taxes. While one of those options may not be so bad, failing to meet this financial obligation could prove expensive.

Missing one year’s filing may not be that bad, especially if a return is filed the following year. A taxpayer may end up owing not only taxes but penalties and interest as well, but it may be better than not filing for several years. When individuals fail to file their tax returns, the IRS will most likely file one for them.

Employers are required to report income paid to employees, so the IRS will most likely have the information it needs in order to file an Automated Substitute for Return. This return will not take into account any deductions or credits of which a particular taxpayer may be able to take advantage. For this reason, it would be a good idea not to ignore a notice of ASFR from the IRS. 

Taxpayers have rights even when it comes to unfiled tax returns. They do not have to simply accept the assessments from the IRS. There are processes in place to give individuals the right to challenge them. Massachusetts residents who find themselves in this position may want to reach out to a tax attorney for assistance.


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